KNOT Offshore Partners - Distribution Cut Close At Hand Now

Nov. 30, 2022 5:29 PM ETKNOT Offshore Partners LP (KNOP)TNP125 Comments
Henrik Alex profile picture
Henrik Alex
15.03K Followers

Summary

  • Company reports weak Q3 results with the distribution coverage ratio well below 1.00 for the third quarter in a row now.
  • Results continue to be pressured by an elevated number of scheduled drydockings with additional impact expected in the current quarter and also for next year.
  • Q4 results are likely to be equally weak due to a mix of scheduled and unscheduled offhire days and the North Sea fleet operating at reduced rates or sitting idle.
  • Company is considering trading some of its North Sea vessels in the conventional tanker market but warns investors of potentially insufficient returns.
  • A near-term distribution cut appears to be close at hand now. Given the ugly near-term outlook, investors should consider selling existing positions and moving on.
Von einem Schiff, das in der Arktis segelt. Landschaft der Arktis

lyash01/iStock via Getty Images

On Tuesday, leading shuttle tanker operator KNOT Offshore Partners (NYSE:NYSE:KNOP) reported another set of weak quarterly results with Q3 representing the third consecutive quarter with a distribution coverage ratio of well below 1.00:

Key Financial Metrics

Company Press Releases

Results continue to

This article was written by

Henrik Alex profile picture
15.03K Followers
I am mostly a trader engaging in both long and short bets intraday and occasionally over the short- to medium term. My historical focus has been mostly on tech stocks but over the past couple of years I have also started broad coverage of the offshore drilling and supply industry as well as the shipping industry in general (tankers, containers, drybulk). In addition, I am having a close eye on the still nascent fuel cell industry.I am located in Germany and have worked quite some time as an auditor for PricewaterhouseCoopers before becoming a daytrader almost 20 years ago. During this time, I managed to successfully maneuver the burst of the dotcom bubble and the aftermath of the world trade center attacks as well as the subprime crisis.Despite not being a native speaker, I always try to deliver high quality research at no charge to followers and the entire Seeking Alpha community.

Disclosure: I/we have a beneficial short position in the shares of KNOP either through stock ownership, options, or other derivatives. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

Recommended For You

Comments (125)

To ensure this doesn’t happen in the future, please enable Javascript and cookies in your browser.
Is this happening to you frequently? Please report it on our feedback forum.
If you have an ad-blocker enabled you may be blocked from proceeding. Please disable your ad-blocker and refresh.