South Bow (SOBO) Q2 2025 earnings summary

Executive summary

• Generated CND 250 million of normalized EBITDA in Q2 2025, maintaining strong cash flows despite market volatility and operational downtime.

• Achieved average throughput of 544,000 bbl/d on Keystone Pipeline and 760,000 bbl/d on U.S. Gulf Coast segment in Q2 2025, meeting contractual commitments.

• Advanced the Blackrod Connection Project, including completion of a 150,000-barrel storage tank, on track for early 2026 in-service.

• Maintained safe operations and rapid remediation following the Milepost 171 incident, with a focus on integrity and reliability.

• Implemented a new enterprise resource planning system and progressing toward full operational independence post-spinoff.

Financial highlights

• Q2 2025 revenue was $524 million, net income $96 million ($0.46/share), and normalized EBITDA $250 million, down 6% sequentially due to lower Marketing contributions.

• Normalized EBITDA for Q2 2025 was CND 250 million; 90% of normalized EBITDA is contracted.

• Reaffirmed 2025 normalized EBITDA outlook at CND 1.01 billion.

• Revised distributable cash flow outlook to CND 590 million, up from CND 535 million, reflecting tax savings and interest income.

• Quarterly dividend of CND 0.50 per share approved, payable October 15.

Outlook and guidance

• Expect to fulfill committed throughput contracts for the remainder of 2025, with limited spot capacity on the Keystone system.

• Net debt-to-normalized EBITDA ratio expected to be approximately 4.8x at year-end 2025; deleveraging to accelerate as Blackrod cash flows begin in H2 2026.

• 2%-3% EBITDA CAGR growth outlook maintained; exit from transition service agreements to enhance operational focus.

• Maintenance capital expenditures revised to $55 million (±3%) to prioritize MP-171 remedial actions.

• One-time separation costs for the spinoff now expected at $30–$40 million, down from $40–$50 million.