We did the same—and for the same reasons—with TGS-NOPEC Geophysical (OSL:TGS, Financial), a Norwegian business that provides geoscience data to oil and gas exploration and production companies worldwide. Its shares suffered a material decline in the first half as oil prices collapsed, with a markedly negative impact on the exploration budgets of TGS-NOPEC's customers. We have long been aware, of course, of the cyclical nature of its business. We have always sought to manage our position in an effort to take advantage of this cyclicality given the company's ability to rapidly flex up and down its operating and capital expenditures to continue generating cash in even the most severe downturns.
From Chuck Royce (Trades, Portfolio)'s Royce International Premier Fund (Trades, Portfolio) second-quarter 2020 commentary.
