South Bow Down 3.6% In US Premarket As Reports Improved Q4 Normalized Net Income, But Wary About Sustained Tariffs War

South Bow , a spinoff of TC Energy, was at last look down 3.6% in US premarket trade on Thursday as it reported that its normalized net income increased in the fourth quarter, even if revenues were lower, but provided a wary market outlook based on concerns around a sustained tariffs war between Canada and the United States.

For Q4, normalized net income was US$112 million, or US$0.54 per share, up from US$94 million, or US$0.45 per share.

Normalized EBITDA came in at US$290 million, rising from US$278 million. Revenue declined to US$488 million from US$540 million.

Distributable cash flow rose to US$183 million from US$161 million.

Keystone Pipeline throughput amounted to 621,000 barrels per day, up from 612,000 b/d.

The company expects normalized EBITDA of about US$1.01 billion in 2025 and reaffirmed long-term normalized EBITDA growth outlook of 2% to 3%. Distributable cash flow in 2025 is projected to be about US$535 million.

South Bow's board has approved a quarterly dividend of US$0.50 per share, payable April 15 to shareholders of record at the close of business on March 31.

In a market outlook, South Bow said every day it transports crude oil to key demand and refining markets in the U.S. Midwest and Gulf Coast. With substantially all of the crude oil imported into the U.S. Midwest originating from Canada, and refining facilities in the U.S. Gulf Coast set up to process heavy crude oil, these markets rely heavily on Canadian crude oil supplies to meet their energy needs, it noted. This comes at a time when US President Trump is putting a tariff on Canadian energy.

Also, while approximately 90% of South Bow's normalized EBITDA is contracted through committed arrangements, which carry minimal commodity price or volumetric risk, South Bow said demand for uncommitted capacity on the Keystone System is anticipated to remain subdued in 2025 as Western Canadian Sedimentary Basin (WCSB) crude oil pipeline capacity exceeds supply.

South Bow added: "The potential for, and continuation of, tariffs on energy imposed by the U.S. government and counter-tariffs imposed by the Canadian government have created economic and geopolitical uncertainty, resulting in volatility in pricing differentials. Persistence of this uncertainty may create additional headwinds for uncommitted capacity on South Bow's pipeline systems and impact South Bow's Marketing segment results. Given the uncertainty, South Bow's guidance for 2025 does not account for the future potential impact of sustained tariffs."