KNOT Offshore Partners LP (NYSE:KNOP) Q4 2019 Earnings Conference Call - Final Transcript
Mar 12, 2020 • 12:00 pm ET
Good morning, and welcome to the KNOT Offshore Partners' Fourth Quarter 2019 Earnings Results Conference Call. [Operator Instructions] Please note this event is being recorded.
I would now like to turn the conference over to Gary Chapman. Please go ahead.
Thank you. Welcome everybody. The earnings release and slide presentation are both available on our website.
By way of a recap, KNOT Offshore Partners, KNOP, focuses on the shuttle tanker segment, whereby, our ships transport oil from production units to shore side often loosely described as a mobile pipeline business, and they form an essential part of the supply chain for our customers.
As before, on today's call, our review will include non-U.S. GAAP measures, such as distributable cash flow and adjusted earnings before interest, taxation, depreciation and amortization, EBITDA. The earnings release includes a reconciliation of these non-GAAP measures to the most directly comparable GAAP financial measures.
Please remember that any forward-looking statements made during today's call are subject to risks and uncertainties and these are discussed in our annual and quarterly SEC filings. Actual events and results can differ materially from those forward-looking statements and the Partnership does not undertake a duty to update any forward-looking statements and I refer you to Slide 2 for further details.
Today, I'd like to run through the numbers on where we are today and then move on to try to give more details about our market and our outlook that I hope will be useful. So turning straight on slide 3, Q4, 2019 financial highlights and recent events. KNOP's results were very strong and much in line with expectations. Total revenue of $70.1 million, operating income of $31 million, net income of $23.8 million and adjusted EBITDA of $53.6 million.
Distributable cash generated of $26.4 million, giving a distribution coverage ratio at the end of the quarter of 1.46 times and a continuation of the cash distribution of $0.52 per unit, returning an annual yield of some 13% based on a $16 unit price.
During the quarter, the fleet operated with 99.7% utilization for scheduled operations, and since our IPO in 2013, we've operated with an average of also 99.7% excluding all scheduled maintenance and dockings. The planned drydocks of the Raquel Knutsen originally scheduled for early 2020 was brought forward as it was commercially advantageous to do so. But as a result, this impacted the results in December through having 18 offhire days.
The impact of the drydocking in 2020 will, therefore, of course be reduced having taken some of this in 2019. There are no more drydocks planned in 2020 and the Raquel returned to service on March 5th, 2020.
We mentioned during the last call that Shell agreed to take up the next one-year option on the Windsor Knutsen, meaning this vessel, the first put into the MLP is now contracted through October 2020. In October 2019, Equinor exercised its option to extend the time charter with Bodil Knutsen by one additional year until May 2021. And again in