Jan. 13--Samitivej Plc (SVH), one of the flagship hospital chains under Bangkok Dusit Medical Services (BGH), has put on hold its one-billion-baht planned investment for 2009 to 2011 as it seeks to keep cash in face of economic hardships.

Last year, SVH's board considered constructing a new building at its new branch in Si Racha and renovating its Samitivej Srinakarin, where the structure is over 16 years old.

Raymond Chong, managing director and chief executive of SVH, said the decision came after the health-care market had started to feel the pinch from the global economic slump and internal politics continued to erode spending sentiment.

He said the negative signs became apparent in the last quarter of last year, when the airport closures had caused the number of overseas patients to drop by 10 percent. The deteriorating economy had also affected spending among factory workers in Si Racha by 5 percent during the period.

However, he is still optimistic revenue would grow 8-10 percent this year, roughly half of 2008's 15-16 percent increase in profit on estimated total sales of 5.75 billion baht.

SVH's room occupancy rate was 65-70 percent of 770 beds in total last year.

Despite the slow sales growth, SVH expects to boost its margin through energy-cost improvements and resource sharing among its three hospitals in Sukhumvit and Srinakarin in Bangkok and Si Racha in Chon Buri.

"Net profit in 2007 was up 6.7 percent and in 2008 we expected to see this surge to 9.4 percent and 10 percent is hopeful this year from expenditure controls," he said.

"The target will be achieved through new services launched, aggressive marketing campaigns and the expansion to new markets," he added.

As well, easing political rifts and the government's efforts to restore the confidence of tourists and investors will boost the number of visitors and spending by local patients.

SVH said it would continue to invest to improve services in the area of human resources and technology. "Major investment will be postponed, but we will keep spending 2-3 percent of our yearly revenue on equipment replacement and another 150 million baht on the information technology system which should improve our admission and discharge processes," Mr Chong said.

Despite expected growth in revenue and profit, SVH warned dividend might not be paid, stressing the need to keep cash to finance essential investments.

SVH shares last traded on the Stock exchange of Thailand at 56 baht, unchanged.

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