Fiscal 2014 proves positive for the majority of Micronesia’s top revenue-generating businesses, and confidence continues for the year ahead
By Jackie Hanson
Every year Guam Business Magazine polls companies doing business in Micronesia — including in Guam, the Northern Mariana Islands, the Federated States of Micronesia, Palau and the Marshall Islands — whose gross revenues for the previous year totaled more than $1 million. They are asked to provide their revenues, number of employees and their company profile as well as respond to an economic confidence survey looking forward. The study is the only one of its kind in the region and yields telling results regarding the health of the business environment in Micronesia and what industries are leading the pack.
Of the 32 companies on the list this year — 30 of which provided revenues for both 2014 and 2013 — 70% experienced growth in revenues over the previous year compared to 76% in last year’s survey. Of the 21 companies that experienced positive growth, 14 increased revenues by up to 20%, and three of the 21 increased revenues by more than 40%.
The “most improved” company this year was Monster Auto Corp., which does business as Guam AutoSpot, which saw increased revenues of 113%. Core Tech International Corp. and Pacific Data Systems were the runners up with 86.7% and 44.2% growth, respectively.
Of the nine companies that experienced a decrease in revenues, five experienced less than 5% of a decrease, while the remaining four experienced greater than 10% ranging up to 58%. All but one of the nine companies experiencing negative growth were in the bottom half of the list, earning less than $56 million for the year.
In line with last year, the petroleum companies on the list saw decreases or only a slight increase ranging from -5% to 1.8%.
Also in line with last year, the telecommunications industry proved profitable with Docomo Pacific, GTA and Pacific Data Systems seeing 6%, 30% and 40% improvements, respectively.
Banks in the region improved overall from last year, with the Bank of the Marshall Islands leading the pack with 18.22% growth. Three of the four banks on Guam ranged from a slight decrease up to a 9.3% increase.
All primarily auto-related businesses on the list fared well, as did two of three construction companies and two of three hotels, the third being on Saipan with a 3.6% decrease.
The economic confidence surveys proved mostly positive with nearly 80% of respondents expecting revenue growth of 2% to 50% in 2016. For staffing needs, 58% expect to hire staff in 2016 with equal numbers expecting to increase staff 1% to 10% and 10% to 20% and one expecting a 300% increase. Eight percent of the Top Companies expect to decrease staff in 2016.
Just more than 70% said their economic expectations for 2015 were fulfilled. Those whose expectations were not fulfilled indicated the continued drop in the Japanese market and an increase in hotel inventory as the factors. Others noted expired federal contracts that they were unsuccessful in attaining again.
Nearly 88% expect the economy to provide specific opportunities for their business in 2016, the majority of which cited opportunities related to the military buildup and tourism growth including a hopeful rebound of the Japanese market. Private sector growth was also identified as an opportunity in several areas including the opening of the Dusit Thani Guam and work that will be needed there, modest growth in the real estate industry and investments being made in infrastructure.
Casino and resort development in the NMI was also indicated as an opportunity for business in the coming year. As the various hotel and casino investors establish roots in the NMI and begin to generate revenue — including Alter City Group, Best Sunshine International Ltd., Honest Profit International Ltd. and others — Guam Business looks forward to including them on future Top Companies lists.
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