Semco Maritime A/S

Ledelsesberetning

RENEWABLESOffshore substation sail-away from AalborgThe first of three offshore substations for the Coastal Virginia Offshore Wind (CVOW) project left the Port of Aalborg in late 2024 heading towards the United States after completion of manufacturing and installation works. The project represents a monumental step in renewable energy develop-ment, being the world’s largest offshore wind project to date. Semco Mari-time and Dominion Energy Virginia have entered into a turnkey contract to construct three 880 MW offshore substations by 2025, with commissioning set for 2026. The 2.6 GW CVOW project will be located 40 kilometres off Vir-ginia Beach and power up to 660,000 households, reducing CO2 emissions by up to 5 million tonnes annually.2024 highlightsDKKm58% DKKm6,514Renewables5,937Renewables Renewables5,640DKKmConventional Conventional energyenergy2023 2024Revenue Order book42% Conventional energyEBITDA before special items318 DKKm Equity ratio26.9%Employees• 2,326 employees (average)• 5.8 million man-hours*• LTAF (Lost time accident frequency): 0.3Renewables• Contract signed for 1 substation (500 MW)• Sail away of 1st jacket and OSS for Coastal Virigina Offshore Wind • Seafastening and crane upgrades• First MCE (Major Component Exchange) in France and UK completed• Three key onshore and energy infrastructure projects won • Order intake of DKK 2,778 millionConventional energy• >700 modification and service projects and 7 yardstays• Tyra Hook-Up commissioning and extension of key manpower UK contract • 1,000 employees working in offshore rotation• 2.2 million offshore man-hours*• Order intake of DKK 2,285 millionStrong performance in transformative times2024 was another strong year for Semco Maritime as we continued the profitable growth and the shift towards our Renewables business in line with our strategic targets. Our markets are evol- ving, and we are well positioned to seize oppor- tunities and continue the positive development in the coming years.Continued profitable growthWe maintained the momentum of recent years and de- livered stronger growth in 2024 than initially anticipated. Revenue increased 12% to a record level of DKK 5.6 billion driven by continued progress and 34% growth in our Renewables business. The growth rate was sup-ported by a strong contribution from the integration of Wind Multiplikator and by a one-off task as we entered an agreement to take on a significant additional work scope for a cooperation partner to assist a mutual customer. The Conventional energy business saw a 9% decline in revenue due to the completion of redevelop-ment projects during the year and with fewer rigs cal- ling into port for upgrades as expected.The efforts in 2024 resulted in a 4% increase in earnings with EBITDA before special items reaching DKK 318 million. We were pleased to set another earnings record even though the profit margin declined slightly to 5.6% on the back of the extra work we took on in Renewables as referred to above. The order intake was solid in 2024, albeit below the exceptionally high level in 2023 as anti-cipated and due to less attractive investment conditions and protracted decision-making in the offshore wind space. Against that backdrop, we enter 2025 with an or-der book of DKK 5.9 billion with Renewables accounting for 88% and Conventional energy for 12%.The balance has shiftedWe continued to pursue our Sustainable Growth strategy in 2024, taking significant strides to grow the Renewables business’ share of group revenue to 65% by 2027. Through continued efforts since the launch of the strategy during 2022, we have successfully grown the share of group revenue from Renewables, which exceeded half and reached 58% in 2024 against 24% in 2021. More notably, we have done so while still grow-ing the Conventional energy business by 27% in the same period. I am proud that our skilled employees are delivering on the strategic goals with such perse-verance in years marked by great uncertainty.While the Renewables business is gaining ground and accommodating the tectonic changes in global energy markets, we are recalibrating and evolving our conventional offering in parallel. We have taken on several new and exciting projects, including the fabri-cation of structures for an LNG terminal in Elbehafen, Germany, and mechanical and electrical installation works at Topsoe's innovative facilities and infrastruc-ture at the company’s new electrolysis factory in Her-ning, Denmark. In early 2025, we continued to build on our positive momentum as SLB Capturi entrusted us with the electrical and mechanical installations for deploying their carbon capture technology at Avedøreværket (Avedøre Power Station) in Hvidovre, Denmark. The ongoing recalibration of our project portfolio is expected to continue in support of the energy transition, and we are leveraging our specialist competencies across business areas.On track towards ambitious goalsBased on the good operational and financial results in 2024, we remain on track – and ahead of schedule – to realise the ambitious goals set out in our Sustainable Growth strategy. We still aim to reach revenue of DKK 6 billion with an EBITDA margin of 7% in 2027, and we see a clear route to these milestones through our relentless focus on quality and our ability to adapt to the ever-changing conditions in global ener-gy markets.During the year, we reaffirmed our strategic direc-tion, which enables us to navigate the challenging waters of political and macroeconomic uncertainty, increasing costs and a lack of investment in energy infrastructure. Our dedicated employees are crucial to our ability to deliver strong performance under these circumstances, and we are pleased to see good employee satisfaction and retention levels. We are proud of our people and look forward to continu-ing our positive development in 2025 and beyond.Semco Maritime at a glanceA fossil-free future calls for a sustainable energy transition where conventional and renewable energy sources coexist effectively until the day when renewables can fully keep the world running.Semco Maritime is an international engineering and contracting company with around 2,300 employees and more than 40 years of dedication rooted in both the conventional energy sector and the offshore wind industry. This puts us in a unique position to bridge today's and tomorrow’s solutions, constantly seeking clever and pragmatic ways to realise global energy ambitions. We do this through comprehensive project management across all phases of energy projects together with world-leading partners across the globe.The North SeaThe Baltic SeaVirginiaTaiwanOwn facilities and offices Significant order book in Renewables Progress towards 2027 targetsSemco Maritime continued to pursue its Sustainable Growth strategy in 2024, making significant progress across the Renewables and Conventional energy business areas to reach the Group’s ambitious 2027 targets. Con-tinued growth in the offshore wind space was supplemented by an increase in other projects supporting the green energy transition. The offshore wind market continues to offer a range of growth opportunities for the Group. In addition, Semco Maritime is leveraging decades of experience from the oil and gas industry and its highly specia- lised offshore expertise to pursue growth within carbon capture and storage, power-to-x, infrastruc-ture and other projects related to the green energy transition.Since the launch of the Sustainable Growth strategy in 2022, Semco Maritime has more than doubled its revenue while improving profitability and increasing the Renewables business’ share of overall revenue. In 2027, Semco Maritime aims to generate revenue of DKK 6 billion with an EBITDA margin of 7% and a 65% Renewables share of overall revenue.Gaining ground in offshore wind serviceFollowing the acquisition and integration of German full-service provider Wind Multiplikator Group in 2023, Semco Maritime boosted the Group’s capacity, capabilities and competencies in the offshore wind service market and leveraged the greater scale of the overall Renewables business in 2024.The Group aims to become the global leader for large renewable infrastructure projects and with-in operations and maintenance (O&M) to offshore wind farms in particular. The offshore wind service business offers the full range from EPCI contracts and project management to operational manage-ment of offshore wind farms and major component exchanges and repairs.Building strong partnershipsSemco Maritime continues to build on the Group’s market-leading position and unique expertise in the development, construction and commissioning of offshore substations for offshore wind projects.To further strengthen the Group’s capacity and ca- pabilities, Semco Maritime has established a new consortium with Navantia Seanergies, which has state-of-the-art facilities at strategic locations at shipyards in Fene, Ferrol, Puerto Real and Cartage-na in Spain. The new partnership complements the existing consortium partnership with Vietnam-based PTSC Mechanical & Construction.Supporting the green energy transitionIn the Conventional energy business, Semco continues to draw on its long-standing track record in the offshore market. It leverages the deep expertise from numerousoil and gas operations in conventional energy projects in the North Sea region, which requires specialist com-petencies, and within power-to-x projects and other energy infrastructure assignments. Relevant projects include mechanical and electrical installation work at Topsoe’s electrolysis factory in Herning, Denmark, colla- boration with Hyme Energy to provide industry-scale energy storage, and the construction of structures for an LNG terminal at Elbehafen in Germany.Business modelMotivation We enable a safe and sustainable energy transitionGroup targets 2027• Revenue split between Renewables and Conventional energy 65% / 35% • EBITDA margin of ~7%Safety Commitment Responsiveness Reliability Inspiration Renewables MarketsConventionalenergyBased on affordable, reliable and sustainable solutionsValue creation7 driversSafety: Reducing number of work accidents to zeroPeople: Employer of choice within offshore energySustainability: CO neutrality 2in own operations by 2030Customers: Preferred part- ner and top 3 in core marketPartners: Strong partner- ships to support growthService: 40% from OPEXbusiness Execution: Affordable - Reliable - SustainablePOWERTOXSupporting Topsoe’s visions and the green energy transitionThroughout 2024, Semco Maritime performed a range of mechanical and electrical installation workstreams at Topsoe’s innovative facilities and infrastructure at the company’s new electrolysis factory in Herning, Denmark. The contract was won in late 2023 and comprised project manage- ment, planning and preparation ahead of the on-site installation activities with Semco Maritime deploying highly skilled and dedicated teams ensuring seamless operations throughout the project, which was completed in early 2025. The ground-breaking power-to-x factory will have production capacity of 500MW per year and po-sition Denmark as a key power-to-x player in the global market. The project marks another mile-stone in Semco Maritime's commitment to green energy transition.Developments in 2024Semco Maritime maintained the positive momentum in 2024 and delivered higher-than-expected growth and satisfactory profitability while ensuring a strong order inflow and continuing the shift towards the Renewables business in accordance with the Sus-tainable Growth strategy.RevenueGroup revenue increased by 12%, to DKK 5,640 million (2023: DKK 5,029 million) following strong performance in the Renewables business and a moderate decline inthe Conventional energy segment in 2024 after the com- pletion of redevelopment projects. Semco Maritime main-tained a high activity level across business units, and rev-enue in the Renewables business was positively impact-ed by the full-year effect of the acquisition and integra-tion of Wind Multiplikator Group completed in May 2023.The order inflow was strong and came to DKK 5,040 million (2023: DKK 7,111 million) in 2024, which was significantly higher than in previous years, albeit lower than the exceptional level in 2023. The Group’s order book came to DKK 5,937 million (2023: 6,514 million) at the end of 2024.RenewablesThe Renewables business grew revenue by 34% to DKK 3,227 million (2023: DKK 2,406 million) in 2024, suppor- ted by continued solid demand and activity within offshore substations and services for offshore wind projects. The progress was positively impacted by the full-year effect of the acquisition and integration of Wind Multiplikator Group completed in May 2023.In 2024, the order inflow was DKK 2,754 million (2023:DKK 4,487 million), which was strong but lower than the exceptionally high inflow in 2023 of several offshore substation contracts and multi-year contracts for provi-sioning of services for offshore projects. The strong or-der inflow entailed a solid DKK 5,249 million (2023: DKK 5,720 million) order book at 31 December 2024.Conventional energyRevenue declined by 9% in the Conventional energy business to DKK 2,389 million (2023: DKK 2,623 mil-lion) after the completion of various redevelopment projects in 2023 and 2024, and due to a lower activity level within rig projects and service work.The order inflow was DKK 2,285 million (2023: DKK 2,624 million) in Conventional energy for an order book of DKK 688 million (2023: DKK 794 million) at year-end 2024.EBITDA before special itemsDKKm3503002502001501005002020 2021 2022 2023 2024Revenue Renewables Conventional DKKm energy6,0005,0004,0003,0002,0001,00002020 2021 2022 2023 2024Order intake and order bookDKKm Renewables order intake Renewables order book Conventional energy order intake Conventional energy order book8,0007,0006,0005,0004,0003,0002,0001,00002020 2021 2022 2023 2024EarningsGross profit increased by 9% to DKK 2,454 million (2023: 2,255 million) in 2024 for a slightly lower gross margin of 44% (2023: 45%). The capacity utilisation rate remained high, and Semco Maritime continuedto deliver good project execution and maintain pru-dent cost management. Earnings improved with EBITDA before special items increasing by 4% to DKK 318 million (2023: DKK 305 million). The EBITDA mar-gin before special items declined to 5.6% (2023: 6.1%). Special items were an expense of DKK 10 million (2023: expense of DKK 16 million). Financial itemsIn 2024, financial items were an income of DKK 11 million (2023: income of DKK 9 million), driven by an increase in interest rate income.Profit for the yearProfit before tax was DKK 267 million (2023: DKK 271 million) and profit after tax was DKK 199 million (2023: DKK 209 million) in 2024.Cash flowsThe cash flow from operating activities decreased to DKK 402 million (2023: DKK 447 million) due to changes in working capital driven mainly by the high activity level and more contract work in pro-gress at year-end. The cash flow for investment activities declined and normalised in 2024 to an outflow of DKK 37 million (2023: outflow of DKK 150million) from a higher level in the reference year impacted by the acquisition of Wind Multiplikator Group, which was completed in May 2023. The cash outflow from financing activities was DKK 101 million (2023: outflow of DKK 1 million) after payment of dividends.Balance sheetAt year-end, the Group’s net interest-bearing depo- sits had increased to DKK 736 million (2023: DKK 500 million) following short-term prepayments from customers. The Group’s equity increased significantly to DKK 627 million (2023: DKK 543 million) for an equity ratio of 26.9% (2023: 28.2%). Return on equity was 34.0% (2023: 47.6%) in 2024.Events after the balance sheet dateNo events have occurred since the balance sheet date which are expected to have a material effect on an assessment of the Annual Report for 2024.Cash flow from operationsDKKm5004003002001000-1002020 2021 2022 2023 2024Working capital in relation to revenue*%86420-2-4-62020 2021 2022 2023 2024Net interest-bearing deposit DKKmand equity ratio*%1,200301,000258002060015400102005002020 2021 2022 2023 2024Guidance for 2025Semco Maritime expects to continue the positive busi- ness performance in 2025 on the back of strong pro- gress and the good financial results delivered in recent years. The outlook is aligned with the ambitions of the Sustainable Growth strategy and based on expecta-tions of continued high activity in Renewables. The activity level in Conventional energy is expected to be lower due to the completion of several redevelopment projects in recent years and fewer rigs calling into port for maintenance and upgrades.The solid order backlog forms a good foundation for performance in 2025, and the slightly lower Conven-tional energy activity is expected to be partially offset by more service assignments and progress within car-bon capture and storage, power-to-x, and renewable energy projects in support of the green transition.Revenue is expected to be within a 10% range around the exceptionally high level in 2024, which was positi-vely impacted by Semco Maritime taking over an addi-tional work scope for a cooperation partner to assist a mutual customer. The additional work will have less im-pact on revenue in 2025, and the underlying business is thus expected to generate moderate growth despite expected challenges in Conventional energy.Semco Maritime expects to deliver solid profitability in 2025 and reach a profit margin (EBITDA) of 5-7% before special items, supporting the realisation of the Group target of reaching around 7% in 2027 as set out in the Sustainable Growth strategy.The guidance for 2025 is subject to significant uncer-tainty due to political opposition to renewable energy projects in the US, and with continued macroecono-mic volatility dampening investments and affecting the renewable energy sector. In addition, continued geopolitical unrest and armed conflicts entail, among other things, energy price volatility and challenges to the supply of goods and logistics, leading to consider-able fluctuations in costs and low visibility.Forward-looking statements!The forward-looking statements in this Annual Report reflect Semco Maritime’s current expec-tations for future events and financial results. The statements involve uncertainty and the results achieved may deviate from expectations due to trends in economic conditions, commodity prices, subsidy and grant schemes as well as fluctuations in the financial markets and amended legislation and rules in the Group’s markets. See the Risks section on page 20.Recalibration in the renewable energy sectorWhile renewable energy projects in the US market face greater obstacles following changes in political leadership, the global transition of the energy sector continues with a greater focus on Europe and relatively new markets in Asia. In the face of short-term uncertainty, market participants are recalibrating their efforts and geographical focus to support the transition. Against this background, the long-term prospects for renewable energy – and specifically Offshore Wind - remain strong and continue to form a solid foundation for further profitable growth supported by an increasing number of pro-jects within areas such as carbon capture and storage as well as power-to-x.Gender diversity In 2024, Semco Maritime continued the work of building a truly inclusive workplace, where diversity is celebrated, and equal opportunities are afforded to all. Our commitment is rooted in the belief that a diverse workforce, where every individual feels valued and empowered to bring their authentic selves to work, enriches our corporate culture and drives innovation.Throughout the year, we have strategically embed- ded these principles across all facets of our opera-tions, from recruitment processes to leadership de- velopment programmes. We have also expanded our focus to include equitable access in digital spaces,ensuring that our online platforms are inclusive and reach everyone fairly.Transparency and accountability are central to our approach. Our leadership is committed to open- ly sharing our progress, actively seeking feedback, and continually refining our practices to enhance psychological safety and overall workplace inclu-sivity.We are dedicated to ensuring that every member of the Semco Maritime team feels recognised, valued and supported, as we continue to build an environ-ment where inclusion is not merely an aspiration but a tangible reality. This ongoing commitment to diver-sity and inclusion is not just a key component of our corporate strategy, but a cornerstone of our identity and success at Semco Maritime.In 2024, the Board of Directors consisted of 4 male shareholder-elected members, and Semco Maritime did not reach the target of 25% representation of the underrepresented gender on the board as there were no changes in board composition during the year. In February 2025, the Board of Directors was expanded with the election of Tove Røskaft as new board member.Underrepresented gender 2024 Shareholder-elected members, Board of Directors 4Share of underrepresented gender, Board of Directors 0%Underrepresented gender target, Board of Directors 25%Share of underrepresented gender, people leaders 21%Underrepresented gender target, people leaders 20%This Annual Report serves as Semco Maritime’s statutory report on data ethics, as stipulated by sec-tion 99d of the Danish Financial Statements Act. TRANSITIONAL ENERGIESExtension of GMOC with TotalEnergiesIn 2024, the PBS consortium secured an extension to the General Maintenance and Operations Contract (GMOC) awarded by TotalEnergies in 2020 to cover its North Sea assets. Based on positive performance across the range of services covered under the con-tract, TotalEnergies initiated an extension of the origi- nal contract through to May 2026. While the project had a challenging start in 2020 navigating the COVID pandemic, PBS became an exemplary choice for in- tegrated services delivery under the GMOC model, including operations, maintenance, engineering, con-struction, facilities management and access solutions through 1,100 highly skilled staff on TotalEnergies’ offshore sites, at Shetland Gas plant and onshore at the PBS headquarters in Westhill.Management and ownershipManagement structureSemco Maritime’s management consists of a Board of Directors and an Executive Board, which are independent of each other.The shareholders of the company elect the mem-bers of the Board of Directors, which makes overall decisions about the Group’s strategic development, monitors risks and supervises the Executive Board. The Board of Directors consists of six members, of which four are elected by the shareholders and two by the employees.Andreas Nauen was elected by the shareholders at the annual general meeting held on 15 April 2024 and succeeded Gunnar Groebler, who stepped down. In February 2025, Semco Maritime expanded the Board of Directors with the election of Tove Røskaft as new board member, meaning that the current share of female shareholder-elected members is 20%.The Board of Directors is focused on ensuring that the shareholder-elected board members have com-petencies in and experience from one or more of Semco Maritime’s business areas and are capable of contributing to the commercial development of the business.The Board of Directors undertakes its work in compli- ance with rules of procedure that have been prepared in compliance with the provisions set out in the Danish Companies Act. The members of the Executive Board may speak, but cannot vote, at board meetings, and they do not attend meetings when matters reserved for the Board of Directors are considered. The Board of Directors held 18 meetings in 2024.The Executive Board is appointed by the Board of Directors and is responsible for the day-to-day ma- nagement and development of Semco Maritime as well as the operations and performance of the company. The Executive Board is charged with exe-cuting the strategy in accordance with the general resolutions adopted by the Board of Directors. OwnershipThe principal shareholder of the company is Semco Maritime Holding A/S, which is included in the con- solidated financial statements of C.W. Obel A/S and Det Obelske Familiefond, the beneficial owners of Semco Maritime since 1996. C.W. Obel A/S’s solid finan-cial position, deep insight into the industry and long-term ownership have laid the foundation for the stable development of the Group whether during times of attractive or less favourable market conditions.Executive Board Steen Brødbæk, CEO since 2009Extensive international management experien- ce from engineering, technology and manufactu- ring businesses, as well as strong strategic skills. Previous positions as CEO of Arvid Nilsson A/S and Invensys APV A/S as well as managerial positions with ABB A/S. Chairman of the Board of Directors of Carl Ras A/S and member of the boards of directors of Nexel A/S, DI Energi, Frem-stillingsindustrien and Green Power Denmark.Qualified electrical power engineer.Martin Oehlenschlæger, CFO since 2022International management experience and considerable industry knowledge from engineer-ing businesses within the field of renewable energy. Previous positions as CFO with Babcock Wilcox Vølund A/S and Fairwind A/S as well as senior finance positions in the global power manage-ment business, Eaton Corporation. Qualified accountant with a background at the state-authorised audit firm Martinsen.Board of DirectorsAnders Christen ObelChairman since 2004. CEO of C.W. Obel A/S with special competencies in general management of industrial corporations and financing.Andreas NauenMember since 2024. Senior Advisor Renew-ables & Decarbonisation. Previously CEO of Siemens Gamesa Renewable Energy’s Offshore Wind division. Special competen-cies in strategy and management within the international energy industry. He also served as a board member from 2017 to 2021.Keith TaylorMember since 2012. Consultant with a background as Chief Operating Officer of the Technip group’s operations in the APAC region and with special compe-tencies in operations management of engineering and project companies in the conventional energy industry.Tove RøskaftMember since 2025. Head of Offshore Wind in Mainstream Renewable Power and member of the Board of Directors of UMOE Advanced Composites, Freja Offshore and Offshore Norge as well as council member and representative on the DNV council. Special competencies in offshore wind and general management.Jørgen Peter RasmussenMember since 2017. Industrial adviser with a background as CEO of i.a. Schlum-berger and with special competencies in the fields of strategy, business develop-ment and management in the interna-tional conventional energy industry.Susanne LadegaardElected employee representative since 2023. Employed since 1994 at Semco Maritime as Project Leader.Allan Sonnich ThomsenElected employee representative since 2014. Employed since 1996 at Semco Maritime as Senior Instrumentation Engineer.RisksBeing an international engineering and contracting business with project activities in the global energy sector, Semco Maritime is exposed to a number of sig-nificant risks. Management continually monitors these risks to maintain the right balance between risk and the Group's overall earnings and development potential.Anchored in the management teamRisk management is anchored in the day-to-day ma- nagement, and it is handled by the Executive Board within the general framework and guidelines defined by Semco Maritime’s Board of Directors. The respon-sibilities of the Executive Board comprise the ongoing identification and management of risk and any neces-sary adjustment and development of the company’s processes and activities to mitigate such risks.In connection with the conclusion of contracts with customers and collaboration partners, Semco Mari-time engages its legal department, which is also in charge of the Company’s insurance programme. Mate-rial contracts are subject to a review by the Executive Board and approval according to standardised proce-dures. Large individual contracts require joint appro-val by the Executive Board and the Chairman of the Board of Directors, while specific maximum amounts have been defined for contracts that are subject to the approval of the entire Board of Directors.Semco Maritime’s business entities regularly moni-tor developments in health, safety and environment (HSE), which is a key risk area with an important im- pact on the company’s ability to attract and retain customers and employees. The operational respon- sibility for monitoring, following up and reporting HSE matters to the Executive Board lies with the managers of the individual business entities in co- operation with a dedicated corporate function which maintains statistics in the field and ensures knowl-edge sharing and consistent follow-up procedures.The Executive Board reports to the Board of Direc-tors in connection with an annual strategic review of Semco Maritime’s overall risk profile and risk manage-ment, reviewing the conclusions of an external insur-ance broker’s annual review of the company’s insur-ance programme.Materiality assessmentIt is Management’s assessment that the most signi- ficant risks in the upcoming period relate to market developments in the Offshore Wind and the Con- ventional energy business areas, HSE matters, access to qualified labour, developments in the financial markets and supply chain challenges following Rus-sia’s invasion of Ukraine and the conflict in the Middle East. These risks are shown in the figure below based on Management’s combined assess- ment of the probability that, and the potential bu- siness effect of, each individual risk materialising. Risks and risk management processes are described in the following pages.In addition to the risks listed, Semco Maritime has identified other risks, including changes in the balance between conventional energy projects and renewable energy projects as well as IT security and disruption.RisksHighLowLow ProbabilityHighACEBDMarket risks AOffshore Wind and Conventional energySocial and Benvironmental risksHealth, safety and environment (HSE)Access to Cqualified labourFinancial risks DInterest rates, foreign exchange and insuranceESupply chain Market risksAOffshore WindIn recent years, several offshore wind farm projects have been won without sub- sidy-based financing solutions, and the increasing maturity of the market makes it increasingly competitive. Establishing offshore wind farms is dependent on efficient political decision-making processes, and increasing political reluctance in the US in particular, combined with prolonged case handling and detailed requirements on the use of local labour, etc., may have a negative effect on Semco Maritime’s ability to deliver competitive projects to customers. Conventional energyThe Group’s activities and results are influenced by the investment activity in the oil and gas industry, which depends significantly on trends in oil and gas prices as well as in the US dollar exchange rate.Offshore WindSemco Maritime monitors political dialogues and offshore wind farm auctions all over the world and continues to develop the Group's local presence in the most important markets through the establishment of own offices and by entering into strategic partnerships as well as maintaining close dialogues with customers in order to have an overview of industry developments and outlook. The Group continues to optimise costs and continuously looks for innovative solutions that can supplement Semco Maritime’s market-leading service and product offerings to the industry.Conventional energyThe exposure to fluctuations in oil and gas prices is countered by cost efficiency improvements of existing products and the development of new solutions that reduce customer cost bases. Moreover, Semco Maritime has over a period of time diversified the Group’s activities across the Conventional energy and the Renewables business areas. Social and environmental issuesBHealth and safety at workSemco Maritime’s activities involve risks of industrial incidents that may result in personal injury and disrupt the operation of customer assets, which in turn may lead to claims for damages or demands that the Group must take preventive and restor-ative measures.As a supplier to the oil and gas and the offshore wind industries, Semco Mari-time’s ability to maintain satisfactory health and safety at work and the required safety certificates is key to the Group’s continued success.EnvironmentThe Group’s activities – particularly in the offshore industry – are governed by the legi- slation and rules applicable to the handling of environmentally harmful substances and preventive measures to avoid discharges into the sea or on land when the Group undertakes assignments. Unintended discharge may harm the environment, equip-ment and humans, and such discharge may impose a liability on Semco Maritime.Health and safety at workGroup entities report observations and the number and type of incidents on a monthly basis. Semco Maritime has also appointed a special team to analyse the background to incidents and introduce measures to reduce the risk of reoc-currences.Semco Maritime works actively to promote the safety culture of the Group and requires employees to conduct themselves in accordance with the safety policy “Safety is part of our DNA”. The Group strives to rank among the absolutely safest workplaces in the industry, and the level of safety is improved on an ongoing ba-sis through global campaigns, training and education of managers and employ-ees as well as safety talks, etc.EnvironmentEnvironmental risks are managed in cooperation with the Group’s customers in individual projects and on the basis of clear policies and procedures that are laid down and revised at Group level. Access to qualified labourCSemco Maritime relies on qualified and competent employees and managers to be able to deliver projects in a satisfactory quality and to continue to grow and develop the Group. Any inability to attract, develop and retain employees and managers may have a negative impact on the Group’s overall competencies, growth op-portunities and financial results.Semco Maritime monitors employee satisfaction on a regular basis through employee satisfaction surveys with the focus on subjects such as management, collaboration and work/life balance. The company also measures employee turnover, sickness absence and results of appraisal interviews, using the results as a basis for targeted efforts to enhance working conditions and offer attractive career opportunities within the Group.The Group keeps prospective employees and managers informed about development opportunities, work assignments and working conditions with a view to strengthening the recruitment potential. The Group has also established a programme for employees aged under 35 intended to strengthen social cohesion and accelerate the professional development of its younger employees. Financial risksDInterest ratesFor its funding, the Group is exposed to changes in interest rates, which may affect customer investment decisions and the Group’s financial expenses.Foreign currencySemco Maritime’s operations are exposed to currency risks. The Group issues invoices in DKK, EUR, GBP, NOK, SGD and USD, whereas a significant proportion of goods purchased are denominated in DKK, EUR, GBP, NOK and USD. In addition to these transaction risks, Semco Maritime is exposed to translation risks arising when the income statements and ba-lance sheets of foreign subsidiaries are translated into the Group’s operating currency (DKK).InsuranceThere may be cases when the insurance taken out by the Group does not cover losses or provides only partial cover, and there may be long periods of uncertainty as regards the cover of losses.Interest ratesSemco Maritime’s treasury function monitors the level of interest rates on an ongoing basis and secures a balanced mix of prepayments, debt and capital structure. In addition, Semco Maritime’s focus on efficiency and ongoing cost reduction helps set off increases in the finan-cing expenses of customer projects.Foreign currencyThe Group treasury function enters into forward exchange contracts for the purpose of hedging Semco Maritime’s greatest transaction risks at Group level and in individual large-scale projects, and such risks are hedged on an ongoing basis as part of the day-to-day operations as purchases of goods and invoicing are to a large extent denominated in the same currency. Translation risks are not hedged, as translation into the Group’s operating currency does not have any material effect on liquidity. Semco Maritime does not make speculative transactions.InsuranceSemco Maritime has established an extensive insurance programme reflecting the Group’s activities. The overall insurance programme is reviewed once a year and comprises, for instance, a contractors all-risk policy, property insurance, third-party liability insurance and other statutory and contractual insurance policies. Supply chainEA well-functioning supply chain is essential for Semco Maritime’s ability to execute and deliver projects in accordance with the plans and budgets agreed with the Group’s customers. Challeng-es arising in the global logistics industry following Russia's inva-sion of Ukraine, conflict in the Middle East and increasing tension in global trade cause uncertainty and reduced transparency in supply chain stability and may result in shortages of materials and components needed for the Group’s installations and engi-neering work. Disruptions may cause challenges or delays to projects, which may have a negative impact on the Group’s financial results and reputation.Semco Maritime continually stays in touch with business partners, suppliers and customers about the supply situation and in connec-tion with identifying critical materials and components needed to execute the Group’s projects. The project managers in charge and the Group’s procurement functions work to secure purchases of the necessary materials and components with a view to countering the risk of delays and inefficient project execution.RENEWABLESPreferred supplier for Formosa 4 offshore substationA consortium consisting of Semco Maritime and PTSC Mechanical & Construction (PTSC M&C) signed a Preferred Supplier Agreement with Synera Renewable Energy (SRE) for delivery of the 500MW offshore substation of the Formosa 4 wind farm project to be located 39 kilome-tres off the coast of Taichung on the Taiwanese west coast. Engineer-ing and procurement activities for the substation commenced in 2024 with scheduled delivery in 2027. All structures will be fabricated at PTSC M&C’s yard in Vungtau City (Vietnam) with Semco Maritime being re-sponsible for design, procurement and commissioning of the main MV/HV electrical system as well as auxiliary platform systems. Formosa 4 is the fourth offshore substation project won by the consortium.Group overviewParent: Semco Maritime A/S Denmark Subsidiaries:Semco Maritime Inc. USA 100%Semco Maritime Renewables LLC USA 100%Bladt Semco Renewables LLC USA 50%Semco Maritime Renewables II LLC USA 100%Semco Maritime Renewables Holding US LLC USA 100%Semco Maritime Renewables III LLC USA 100%Semco Maritime Offshore Services LLC USA 100%Protobase Ltd. UK 100%Semco Maritime AS Norway 100%Semco Maritime Drift AS Norway 100%Semco Maritime El Salvador S.A. El Salvador 100%Semco Maritime Pte Ltd. Singapore 100%Semco Maritime LLC Taiwan ROC 100%Semco Maritime Vietnam JSC Vietnam 100%Semco Institute A/S DenmarkSemco Maritime Energy Infrastructure Tanzania Ltd. Tanzania 99.1%Semco Maritime UK Ltd. UK 100%Semco Maritime Namibia Ltd. Namibia 100%Semco Maritime, S.L. Spain 100%Semco Maritime Middle East Ltd. UAE 100%Semco Maritime GmbH Germany 100%WM Holding GmbH Germany 100%Wind Multiplikator GmbH Germany 100%Wind Multiplikator QHSE GmbH Germany 100%WM Offshore GmbH Germany 100%Wind Multiplikator Ltd. UK 100%Wind Multiplikator Atheleon Offshore GmbH Germany 50%Seguco S.A. Guatemala 100%Compania de Servicios y Guatemala 83% Combustion Industrial S.A. (C2SI) Semco Maritime Sp. z.o.o. Poland 100%Semco ETP Renewables Sp. z.o.o. Poland 50%