By Jackie Hanson
Editor’s note: Guam Business Magazine conducts an annual poll of companies doing business in Micronesia whose gross revenues for the previous year total more than $1 million. The results of this poll provide an overview of the health of the economy in Micronesia and, more specifically, the health of the business sector. This study is the only one of its kind in the region.
Our Top Companies feature includes results from an anonymous Economic Confidence Survey (see below), responses from each company on its biggest accomplishment in the past year, economic assessments by our sponsors — Joe M. Arnett of Deloitte & Touche and David J. John of ASC Trust Corp. — who have met first-person with some of the executives of last year’s Top Companies list, and lastly, a list of the top revenue-generating companies in the region ranked by gross revenues.
The Top Companies survey this year, based on business conducted in 2015, revealed that 62.5% of Micronesia’s top revenue-generating companies showed positive growth over the previous year. By comparison, 70% of companies on the list last year showed positive growth. Where there was growth in 2015, it was primarily within the 1% to 5% range, with one company exceeding 18% growth. Three companies had reported growth of more than 40% in 2014.
Guam AutoSpot assumed of the position of the most improved Top Company, seeing an increase of 82.68% in gross revenues from 2014 to 2015. This follows its previous year’s growth of 113%. The runners up for most improved gross revenues are ANZ Guam Inc. with an 18.4% increase and Century Insurance Co. (Guam) Ltd. with a 12.65% increase.
In general, the region’s conglomerates trended upwards as did the automotive companies and hotels on the list.
Companies that saw decreases in revenue in 2015 primarily saw 1% to 15% decreases, while Core Tech International Corp. and Mobil Oil saw larger decreases — 34% and 24%, respectively. Nevertheless, both companies ranked high on the list.
Petroleum companies on the list, in general, continue to show negative or only modest growth — in line with the past two years.
In telecommunications, while Docomo remained consistent, GTA and Pacific Data Systems fared much better in 2014 than 2015. Perhaps faring the worst from 2014 to 2015 were construction companies, showing mostly double-digit decreases in revenue across the board.
In our Economic Confidence Survey, companies identified potential reasons their expectations were not met to include delayed contract opportunities, infrastructure failures outside of the company’s control, increase in freight costs and a more financially conservative tourism market. Factors indicated that would decrease business performance further going forward include the passage of the minimum wage increase, the new federal overtime regulations for salaried workers and continued denials of H-2 visa applications.
Regardless of these stumbling blocks, nearly 74% of respondents to our economic confidence survey said they are optimistic that 2017 will provide specific opportunities for their companies. Expected opportunities mentioned in our survey include military buildup spending, additional work orders under existing contracts, resolution of the H-2 visa approvals situation, increased room rates, completion of facility expansions, continued tourism growth and a favorable currency exchange rate.
As for employment, nearly 80% of companies on this year’s list reported their number of staff had increased or stayed the same in the past year. In the coming year, nearly 48% expect to increase staff and 52% expect their workforce numbers to remain the same.
Guam Business looks forward to welcoming more companies on the list next year from all industries to include the new federal contractors and hotel and casino investors that are making their way to the region.