China’s COSCO Shipping Holdings Co Ltd said trade frictions and high oil prices pose risks for the global shipping industry this year, after confirming on Friday that its net profit for 2018 fell by more than half.

The state-owned company, the world’s third largest container shipping line, said net profit attributable to shareholders slid 53.8 percent to 1.2 billion yuan ($178.83 million) last year from 2.7 billion yuan a year earlier.

It had warned profit would slump in January.

Revenue rose 33.6 percent as demand for its container shipping and terminal business remained strong, COSCO said. However, its marine fuel costs rose in tandem with increases in global oil prices over the year, it added.

“Looking ahead to 2019, we are cautiously optimistic on the global economy and shipping situation,” the company’s chairman Xu Lirong said in the statement.

“Many uncertainties such as trade frictions and high oil prices could negatively affect shipping… at the same time we also see some favourable conditions and positive factors,” he said.

These included China’s stable economic growth and the government’s flagship Belt and Road initiative, he added.

COSCO’s outlook for 2019 comes as the global shipping industry slowly recovers from an oversupply of vessels that pushed the sector into a prolonged slump. Some firms merged to survive, while others went out of business.

In Europe, German container shipping firm Hapag-Lloyd said last month volume growth and a modest recovery in freight rates in the second half of 2018 helped lift operating profit by 32 percent.

However, there have been concerns that ongoing trade frictions between the United States and China could harm the performance of shipping firms.

The world’s largest container shipping company A.P. Moller-Maersk saw its share price skid more than 10 percent last month after warning that trade headwinds would slow growth this year.