Financial Data and Key Metrics Changes - The company reported a normalized EBITDA of 1.01 billion, indicating confidence in its financial resilience despite market volatility [8][13] Business Line Data and Key Metrics Changes - Approximately 90% of the company's EBITDA is contracted over the next seven years, which mitigates commodity price and volumetric risks [7] - The company successfully completed the pipeline scope of the Blackrod Connection project, contributing to its operational capabilities [5] Market Data and Key Metrics Changes - The company expects to maintain its contractual commitments of 585,000 barrels per day despite operational pressure restrictions due to the Milepost 171 incident [10][71] - The company has observed headwinds against uncontracted volumes due to increased pipeline egress capacity and tariff uncertainties [43][46] Company Strategy and Development Direction - The company is focused on maintaining a risk-managed approach to capital allocation while pursuing growth opportunities that leverage existing infrastructure [17] - The management emphasized the importance of pipeline integrity and safety, committing to ongoing investments in integrity programs [6][12] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the stability of cash flows due to highly contracted business, despite challenges from the Milepost 171 incident [22] - The company is committed to providing transparent updates to stakeholders as it learns more about the incident and its implications [16] Other Important Information - The company has mobilized over 300 resources in response to the Milepost 171 incident, successfully containing environmental impacts and restoring operations [9][10] - The management highlighted that insurance policies are expected to cover most costs associated with the incident [10][40] Q&A Session Summary Question: Can you elaborate on the range of outcomes post-incident? - Management emphasized that 90% of EBITDA is contracted, reducing risk on the base business, and they are working closely with regulators to assess maintenance activities [21][22] Question: What are the learnings from the incident for future prevention? - Management stated that pipeline integrity and safety are top priorities, with significant investments made in inline inspections and integrity programs [24][25] Question: What is the expected duration of pressure restrictions? - Management indicated it is too early to speculate on the timeframe for pressure restrictions, as investigations are ongoing [30][32] Question: How will the incident impact leverage and costs? - Management expects all costs related to the incident to be covered by insurance or variable tolls, maintaining the debt to EBITDA ratio [39][40] Question: What is the outlook for uncommitted volumes? - Management noted that while there are headwinds against uncontracted barrels, the base business remains stable due to high contract commitments [43][46] Question: What is the long-term growth outlook? - Management highlighted the Blackrod project as a key contributor to future EBITDA growth, with expectations for tightening egress volumes in 2026 [49][50] Question: What is the company's stance on potential asset sales? - Management confirmed that all assets are core and there are no current plans for asset sales, but they remain open to future opportunities [57][58] Question: How is the company responding to market conditions post-election? - Management expressed optimism about the regulatory environment and its impact on capital allocation decisions [53][54]
South Bow Corporation(SOBO) - 2025 Q1 - Earnings Call Transcript