An unexpected economic about-turn and what lies ahead is full of uncertainty

By Maureen Maratita and Morgan Legel

Guam Business Magazine presents the Deloitte & Touche ASC Trust list of Top Companies conducting business in Micronesia — including Guam, the Northern Mariana Islands, the Marshall Islands, and the Federated States of Micronesia — for the 28th year. Companies with more than $1 million in revenues were invited to participate in the annual poll, with 31 companies accepting their invites and sharing their successes and with Guam Business.

Part of the Top Companies feature includes results from an online, anonymous economic confidence survey that captures a snapshot of the participating companies’ bottom lines and finances, staffing trends and expectations for the coming year, with COVID in the picture.

Of this year’s companies, 70.9% of them indicated they experienced revenue growth from the previous year, right in-line with the 2019 list’s results of 70.1%. Staffing for 38.7% of businesses increased as well, logging staffing numbers higher than last year; 16.1% of companies kept the same amount of staff from the previous years.

This year the construction industry remains the bright spot with millions in construction for the military realignment awarded or ahead, though labor shortages are again one of the challenges. Federal funding has eased the pandemic for governments and businesses alike. Retail, restaurants and hospitality, and tourism face a long road to recovery, as do businesses that support those industries. New ideas and economic initiatives have yet to bear fruit.

The confidence survey does not reflect the increases in revenue because it is a forward-looking survey. The information is from 2019, but the survey reflects the present. Note that some companies in this list reported figures for fiscal years that go into 2020.

To get this far through COVID-19, 76.92% of companies relied on their own financial resources, while 38.46% relied on federal loans and 7.69% relied on local government loans.

Therefore 46.15% of executives that participated in the survey said that their company’s bottom line is much worse than the previous year’s. Only 15.38% of the executives said the bottom line was much better than last year.

Answers about bottom lines took into account the effects of COVID-19 on the businesses, which will be seen in next year’s list.

The companies from the 2019 list expected their net revenue to be much better or somewhat better this year — 37.5% and 50%, respectively. Their expectations were not met.

But businesses are hopeful. In the survey, 61.54% of executives said their bottom line would be much better or somewhat better next year.

One executive says, “It is very unpredictable at the moment; however, we don’t foresee it will return to normal condition prior to COVID-19.”

Another says, “We are fortunate that COVID-19 has not significantly impacted our operations and has created new opportunities for our products and services. We are making lots of ‘lemonade.’”.

Read on to see the full rankings of top companies in the region, responses from company leaders on what they learned from the Coronavirus pandemic, and economic assessments by Joe M. Arnett of Deloitte & Touche LLP and David J. John of ASC Trust LLC.

Guam Business looks forward to welcoming again companies on the list next year from all industries.

Deloitte & Touche ASC Trust Corp.
2020 Top Companies in Micronesia