South Bow (SOBO) Q4 2025 earnings summary

Executive summary

• Delivered financial results slightly ahead of expectations in 2025, demonstrating resilience and disciplined decision-making.

• Achieved zero recordable case rate in 2025, progressing major projects and remedial actions after the MP-171 incident.

• Advanced the Blackrod Connection Project to completion, placed into commercial service on time and on budget, expected to boost cash flows in late 2026 and 2027.

• Progressed remedial actions on Milepost 171, prioritizing system integrity and regulatory compliance.

• Focused on balancing growth, financial discipline, and sustainable shareholder returns.

Financial highlights

• 2025 revenue was $1,986 million, down from $2,120 million in 2024; Q4 revenue was $503 million.

• Net income for 2025 was $433 million ($2.07/share), up from $316 million ($1.52/share) in 2024.

• Normalized EBITDA reached $1.022 billion in 2025, slightly above the $1.01 billion guidance, but down from $1.091 billion in 2024.

• Distributable Cash Flow was $709 million, over 30% above original guidance and up from $621 million in 2024.

• Returned $416 million ($2 per share) to shareholders via dividends.

Outlook and guidance

• Reaffirmed 2026 financial outlook, expecting continued strength as Blackrod cash flows ramp up in the second half.

• 2026 normalized EBITDA projected at ~$1.03 billion, with 90% secured through committed arrangements.

• Guidance incorporates limited spot volume growth until pressure restrictions on Keystone are lifted, expected by end of 2026.

• Market for incremental spot movements anticipated to open in early 2027 as basin growth overtakes egress.

• Net debt-to-normalized EBITDA ratio expected to decrease modestly through 2026.