South Bow Reports Second-quarter 2025 Results and Declares Dividend

Executive Summary

• South Bow Corp. reported its second-quarter 2025 financial results, delivering revenue of $524 million and net income of $96 million ($0.46/share).
• The company maintained stable operations with an average Keystone Pipeline throughput of 544,000 bbl/d and declared a quarterly dividend of $0.50/share.
• South Bow revised its 2025 distributable cash flow guidance upward to $590 million (from $535 million) due to lower expected current taxes and a modified definition of the metric, while reaffirming normalized EBITDA guidance of approximately $1.01 billion.

Key Details

• Financial Performance (Q2 2025):
  • Revenue: $524 million.
  • Net Income: $96 million ($0.46 per share).
  • Normalized EBITDA: $250 million (a 6% decrease from Q1 2025, driven by lower Marketing contributions).
  • Distributable Cash Flow: $167 million.
  • Net Debt: $4.9 billion; Net Debt-to-Normalized EBITDA Ratio: 4.6x.
• Dividends:
  • Declared dividends totaling $104 million ($0.50/share) for Q2 2025.
  • Approved a new quarterly dividend of $0.50/share, payable on Oct. 15, 2025, to shareholders of record on Sept. 29, 2025.
• Operational Metrics:
  • Keystone Pipeline average throughput: ~544,000 bbl/d (Q2 2025); ~578,000 bbl/d (H1 2025).
  • U.S. Gulf Coast segment average throughput: ~760,000 bbl/d (Q2 2025); ~744,000 bbl/d (H1 2025).
  • Keystone Pipeline System Operating Factor (SOF): 93% (Q2 2025).
• Project Updates:
  • Blackrod Connection Project: Completed construction of the 150,000-barrel crude oil storage tank. On schedule to finish facilities by late 2025 and be ready for in-service in early 2026.
  • MP-171 Incident: Cleanup and reclamation of the Fort Ransom, N.D. site completed in early June. Four in-line inspection runs and eight integrity digs completed; preliminary results show no injurious issues. Incident costs estimated at ~$58 million, largely recoverable via insurance.
• 2025 Guidance Revisions:
  • Normalized EBITDA: Reaffirmed at $1.01 billion (+1% / -2%).
  • Distributable Cash Flow: Revised up to $590 million (+/- 3%), primarily due to lower expected current taxes from U.S. tax legislation changes and a modified definition (no longer adjusting for interest income/other).
  • Maintenance Capital Expenditures: Revised down to $55 million (+/- 3%) to prioritize remedial actions for the MP-171 incident.
  • Separation Costs: Revised down to $30–$40 million (from $40–$50 million).
• Other Corporate Activities:
  • Implemented new enterprise resource planning (ERP) system in April 2025.
  • Expects to implement new SCADA system in Q3 2025, substantially exiting the Transition Services Agreement (TSA) with TC Energy within one year of the spinoff.
  • Inaugural Investor Day scheduled for Nov. 19, 2025, in New York City.

Notable Quotes

• Note: No direct quotes from the CEO or President were included in the provided text.