KNOT Offshore Partners LP

Shuttle-tanker MLP with strong cash-flow margins and growth but low returns, thin coverage and customer concentration.

Strengths

• Strong OCF margin (42.7%, 81st pct), revenue growth +14.4% (87th pct) and net income up 65% (79th pct)
• Long-term charters with blue-chip oil-major customers (Shell, Equinor, TotalEnergies)

Risks

• Low ROA (1.4%, 37th pct), thin interest coverage (1.36x) and weak liquidity (current ratio 0.26)
• Heavy customer concentration (9 customers), high MLP leverage and distribution-sustainability risk

Notable findings

• Weak liquidityCurrent ratio 0.26 (<1)
• Customer concentration~22% of revenue from one customer/distributor — (“Transpetro”), accounted for approximately 22%, 15%, 13%, 11%, 11%, and 10%, respectively, of our revenues
• Insider buyingInsider buying — 1 open-market buy(s) by 1 insider(s) (~$25M, last 6mo) Form 4 ↗