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Production / Operations

South Bow Reports Third-quarter 2025 Results, Provides 2026 Outlook, and Declares Dividend

By The Northwire Desk — AI Analysis Nov 13, 2025 · 18:02 SOBO · 36.58 SOUTH BOW CORPORATION
SOBO · Price

Executive Summary

  • South Bow reported Q3 2025 revenue of $461 M, net income of $93 M ($0.45/share) and normalized EBITDA of $254 M, a modest 2% increase versus Q2.
  • The company declared a quarterly dividend of $0.50 per share (total $104 M) payable Jan. 15 2026 and extended its C$2 B revolving credit facility to Oct. 3 2029.
  • Updated 2025‑2026 guidance: normalized EBITDA ~US$1.03 B for 2026 (+/- 2%), distributable cash flow $655 M (2026) and $700 M (2025), with net debt-to-EBITDA ratio expected to modestly improve in 2026.

Key Details

  • Operational Highlights
  • Average Keystone Pipeline throughput Q3 2025: ~584,000 bbl/d; U.S. Gulf Coast segment: ~703,000 bbl/d.
  • Blackrod Connection Project mechanically completed; 25‑km gas lateral in service, cash flows to increase in H2 2026 and 2027.

  • Ongoing remedial work on Milepost 171 incident – six inline inspections and 37 integrity digs completed; total incident cost ≈$55 M (≈$16 M reimbursed to date).

  • Financial Performance (Q3 2025)

  • Revenue: $461 M (down from $524 M Q2)
  • Net income: $93 M ($0.45/share) vs. $96 M Q2
  • Normalized EBITDA: $254 M (↑2% QoQ)
  • Distributable cash flow: $236 M (↑$69 M QoQ)

  • Total long‑term debt: $5.8 B; net debt: $4.8 B; net‑debt/EBITDA = 4.6× (unchanged).

  • Capital Structure

  • Extended C$2 B revolving credit facility to Oct. 3 2029.

  • Senior unsecured notes and junior subordinated notes issued Aug. 28 2024; $1.25 B used to repay TC Energy affiliate debt, remainder held in escrow for Spinoff completion.

  • Dividends

  • Quarterly dividend declared: $0.50/share ($104 M total). Payable Jan. 15 2026 to shareholders of record Dec. 31 2025.

  • Guidance – 2025 (Revised)

  • Normalized EBITDA: US$1,010 M ±1%/‑2% (unchanged)
  • Distributable cash flow: $700 M ±2% (up from prior $590 M)
  • Effective tax rate: 20%–21% (down from 23%–24%)

  • Capital expenditures – Growth: $110 M ±3%; Maintenance: $55 M ±3%

  • Guidance – 2026

  • Normalized EBITDA: US$1,030 M ±2%, ~90% secured via contracts.
  • Distributable cash flow: $655 M ±2%.
  • Financial charges: $315 M ±2%; Effective tax rate: 22%–23%.

  • Capital expenditures – Growth: $10 M; Maintenance: $25 M ±$10 M.

  • Outlook & Strategic Items

  • SCADA system transition expected Q4 2025, completing TSA exit with TC Energy.
  • Variable toll disputes withdrawn; indemnity liability capped at $22 M (maximum reached).

  • Anticipated modest increase in net‑debt/EBITDA ratio to ~4.7× by year‑end 2025 due to Blackrod project spend and one‑time separation costs ($30‑$40 M).

  • Conference Call / Investor Day

  • Q3 results call: Nov. 14 2025, 8 a.m. MT (10 a.m. ET).
  • Inaugural investor day: Nov. 19 2025, 7 a.m. MT (9 a.m. ET) – webcast on company website.

Notable Quotes

  • “Our Q3 results reflect the resilience of our core pipeline business and the successful execution of key projects such as Blackrod,” said Martha Wilmot, President & CEO.
  • “We remain focused on delivering strong, sustainable returns to shareholders while maintaining a disciplined capital allocation framework,” added Solomiya Lyaskovska, CFO.
Read the original news release →

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