South Bow's Strong 2024 Performance and 2025 Outlook: A Dividend for Shareholders

South Bow Corp. (TSX & NYSE: SOBO) has reported its fourth-quarter and year-end 2024 financial and operational results, providing a glimpse into its strong performance and outlining its 2025 outlook. The company, which launched as an independent entity on Oct. 1, 2024, following its spinoff from tc energy Corp. (TC Energy), has demonstrated impressive growth and commitment to safety, reliability, and shareholder value.

South Bow's financial performance in 2024 was underscored by the highly contracted nature of its assets, with revenue and normalized earnings before interest, income taxes, depreciation, and amortization (normalized EBITDA) increasing relative to 2023. The company generated revenue of $488 million and $2,120 million for the three months and year ended Dec. 31, 2024, respectively, and recognized net income of $55 million ($0.26/share) and $316 million ($1.52/share) during the same periods. South Bow's normalized EBITDA for the year ended Dec. 31, 2024, was $1,091 million, an increase of 2% from 2023, while distributable cash flow was $183 million and $608 million for the three months and year ended Dec. 31, 2024, respectively.



South Bow's commitment to paying a strong and sustainable dividend was evident in its declaration of an inaugural quarterly dividend of $104 million ($0.50/share) on Nov. 7, 2024. The dividend was paid on Jan. 31, 2025, to shareholders of record on Dec. 31, 2024. This dividend policy demonstrates South Bow's commitment to returning value to its shareholders while maintaining a strong balance sheet and investing in growth projects like the Blackrod Connection Project.

Looking ahead to 2025, south bow expects its net debt-to-normalized EBITDA ratio to increase modestly as the company continues to invest in the Blackrod Connection Project and incur one-time costs of approximately $40 million to $50 million associated with the Spinoff. Consistent with the company's outlook on leverage, South Bow anticipates exiting 2025 with a net debt-to-normalized EBITDA ratio of approximately 4.8 times and that the Company will begin reducing its leverage once the Blackrod Connection Project starts generating cash flow in 2026.

In conclusion, South Bow's strong financial performance in 2024, driven by its commitment to safety, reliability, and shareholder value, has positioned the company for a successful 2025. With a focus on infrastructure investment, regulatory compliance, and dividend payouts, South Bow is well-equipped to navigate the challenges and opportunities that lie ahead. As a shareholder, you can be confident in South Bow's ability to deliver long-term value and growth.