South Bow Corp's stock experienced a 5.92% plummet in the intraday trading session on Thursday. This significant drop in share price was driven by the company's lowered 2025 guidance and concerns over crude oil pipeline capacity constraints.
According to the company's guidance, South Bow has reduced its outlook for normalized EBITDA for its Marketing segment by approximately $30 million compared to 2024. This downward revision is attributed to the continued impacts of Western Canadian Sedimentary Basin (WCSB) crude oil pipeline capacity exceeding supply. Additionally, South Bow has responded to market uncertainty caused by the potential for, and continuation of, tariffs, by unwinding certain positions to minimize its exposure to further pricing volatility.
South Bow also anticipates higher interest expenses of approximately $325 million for 2025, a relatively high tax rate ranging from 23% to 24%, and a modest increase in its net debt-to-normalized EBITDA ratio through the course of the year. The company plans to invest heavily in the Blackrod Connection Project, incurring one-time costs between $40 million and $50 million associated with the project's spinoff.
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