For future development, we will make continual improvement to pursue sustained operations.
2018 was a year in which TSRC’s overall financial performance grew steadily, and its operating performance improved versus the past few years. 2018 saw a number of difficult industry challenges including the weak demand for synthetic rubber caused by slower China automotive and tire market growth and abundant supply of low-price natural rubber, intense pricing pressure driven by aggressive competition, and the trade war which negatively impacted the company’s volume, revenue and profit.
However, the effort over the past years of investing and developing our specialty business portfolio has paid dividends with increased TPE and ASM sales and profit contributions. In particular, our ASM business alliance with global brands in launching high performance sport shoes was very successful, and we were able to run full capacity for all ASM production lines. In addition, we were successful in turning around and significantly improving our joint venture investments in India and China with ISRPL (India) running at above 80% utilization rate in 2018 and turning in good profit, and ARLANXEO-TSRC (China) substantially improving its business performance and profitability. This led to growth in our investment income from the two JVs’ strong profit contribution and together with good efforts in financial management boosted TSRC’s overall profit resulting in strong Net Income and EPS (earnings per share) improvement over 2017, thereby offsetting the impact from the difficult challenges from the economy and end use market.
In total, the shipment of synthetic rubber and TPE product was 453 thousand metric tons in 2018, a reduction of 6% versus prior year. Consolidated revenue was NTD 29,751 million, a decrease of 6% compared to NTD 31,766 million the previous year. Consolidated gross profit was up 5% to NTD 3,489 million and margin was 12%. Consolidated operating profit was NTD 1,302 million, an increase of 8% compared to the previous year. As a result, net income was NTD 1,192 million while EPS was NTD 1.44, representing a 36% increase from the previous year.
Technology innovation is a key foundation for TSRC in driving profitable growth in the long term. Over the past few years, we have successfully developed new solutions to support customers as well as engaging customers in new technology and product development. TSRC has also focused on developing new market segments and applications including material for medical devices, lubricant viscosity modifiers, green tires, and specialty films to improve our market position and value share of specialty polymers.
The key research projects in 2018 include the continued development of SSBR microstructure control technology platform with breakthrough in functional modification, development of high-cis BR with new catalyst technology for plastic modification, tire, and shoe applications, technology development in co-polymerization, hydrogenation catalyst, and product finishing for new generation of HSBC, and continued cooperation with leading global brands to jointly develop ASM with higher performance properties.
In 2018，TSRC was granted 6 patents.
Looking ahead, there is strong consensus in the forecast of a slowdown in global economic growth in 2019 due to trade conflicts, currency and crude oil price volatility, market instability, and the weakening of the China economy. It is envisaged that investment and manufacturing activities will contract with these factors, especially if the trade tensions were to continue in 2019. There are significant uncertainties in 2019 to warrant a cautious business projection.
At the micro level of the synthetic rubber and TPE industry, in addition to the macroeconomic uncertainties described above, TSRC is expected to be confronted with raw materials price pressure due to potential trade fallout, tremendous market price pressure for synthetic rubber with low natural rubber prices not expected to abate and oversupply from vertically integrated suppliers, and profit compression and weak demand for TPE due to trade dispute uncertainties and aggressive competition for market share. These factors will limit the ability for TSRC to exercise pricing leverage and drive profit growth. Nevertheless, we are still pushing hard to target a 4% increase in sales volume in 2019 through increased ASM growth, new geographic markets, and selective growth opportunities with on-purpose products.
Our efforts in expanding high value, high performance product technologies remain on-course with the new twenty thousand metric tons per year advanced SEBS line in Nantong, China coming on-stream in end 2019, and the new seven thousand metric tons per year production facility in Binh Duong Province, Vietnam, for ASM expected to start production in first half of 2020. The new SEBS production line will incorporate new processes and technologies, focusing on products for medical applications such as fluid bags and tubes. These two expansion projects are critical to deliver our five-year growth plan and will strengthen our market position in specialty applications and market segments.
We will continue to strengthen our competitive capabilities and enhance our technology, quality, and customer services in response to the constantly changing market conditions. We expect TSRC to grow and thrive in the future.