Doyon Ltd.

• Author: Kaynor, Carol
• Position: The New Forty-Niners - Company profile

Doyon Ltd.

Like a threatened turtle, Alaska's Interior Native regional corporation responded to the turbulent '80s by retreating into a safe shell of conservative investments, streamlined management and a solitary subsidiary venture. Now, with the danger averted and profits on the upswing, Doyon Ltd. has begun -- slowly and cautiously -- to extend itself once again.

The early '80s were troubled times for a number of Native corporations. At Doyon, the state's largest private landholder and third-largest Native corporation by number of shareholders, several investments lost money in 1983. Doyon's liabilities that year included a refinery project in Fairbanks, which lost $14.2 million; hotel/camp facilities in Prudhoe Bay, which lost $4.7 million; and Doyon Construction Co., which lost $3.2 million. Faced with an overall net loss of $21.3 millin, the corporation began to flounder.

In response, key members of the Doyon board of directors and its management put together a survival plan to return Doyon to profitability again. They reduced overhead: Staffing was cut from 52 people to 19. General and administrative expenses were reduced from more than $7 million to about $3 million. From seven operating subsidiaries in the early '80's, Doyon pared down by closing, selling or otherwise disposing of those operations and assets that posed potential problems or did not provide good returns, and it focused on strengthening areas that showed promise. By the time the ax was put away, Doyon Drilling Inc., the corporation's most profitable subsidiary, had become its sole subsidiary.

Morris Thompson, president and chief executive officer of Doyon, reflecting on the major streamlining done from late 1984 through 1986 to ensure Doyon's survival, remarks, "It's easy to say, but hard to live through." Still, the harsh strategy paid off: Operating revenues between 1985 and 1989 increased from $15.7 million to $34.2 million; while net earnings per share rose from a low of $1.14 to $12.53. Doyon's net income for fiscal year 1989, ending Oct. 31, was $11.4 million.

Doyon has 8,837 shareholders and holds a total of 12.5 million acres of land. The corporation represents the primarily Athabascan people of Interior Alaska. In general, Doyon has performed well since its inceptin in 1972, showing profits in 13 out of 16 years. The 1983 loss of $21.2 million came after eight consecutive years of profits, and it reflected the slowdown of the oil industry in general. Today, after five continuous years of profitability, the corporation appears to have once again found its stride.

The distribution of Doyon shareholders creates an interesting challenge for the corporation. "We have probably the best mixture of shareholders, in that roughly a third of our shareholders live in our villages, a third live in our urban communities, and about a third live in the Lower 48," says the corporation's Thompson.

He says that Doyon tries to treat each group as equally as possible, although such a feat seems Herculean. Because the Doyon board of directors is split equally between rural and urban residents, the percentage of rural representation...