UPDATE 1-Pakistan State Oil FY08/09 loss at 6.7 bln rupees

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KARACHI Aug 12 (Reuters) - Pakistan State Oil (PSO) (PSO.KA) on Wednesday reported a full-year loss of 6.7 billion rupees ($81 million), which analysts said was due to inventory and foreign exchange losses in the first half.

Analysts said the losses were slightly below market expectations, still PSO shares fell in a rising market as the firm did not announce any dividend.

The state-run oil marketing firm had earned net profit of 14.05 billion rupees in the 2007/08 financial year.

"The decline in full-year earnings is due to the massive inventory loss of 19.6 billion rupees and the exchange loss of 3.3 billion rupees in the first half of 2008/09," said Mohammad Talha Asif, an analyst at brokers Invisor Securities.

"Minus these two factors, the company has still posted a healthy earnings per share," he said.

Asif noted that a government decision to revise prices monthly instead of fortnightly is expected to result in minimal inventory gains or losses on imported products going forward.

In a statement sent to the Karachi Stock Exchange, PSO said its 2008/09 sales increased to 719.3 billion rupees from 583.2 billion rupees last year.

However, the cost of producing products rose to 609.7 billion rupees, compared with 465.2 billion rupees last year.

Operating expenses also jumped to 10.8 billion rupees from 7.7 billion.

The company did not give a quarterly break-up of its results.

By 0756 GMT, PSO shares were trading 1.75 percent lower at 256.95 rupees in a broader market .KSE up 0.58 percent.

($1=82.72 rupees) (Reporting by Faisal Aziz and Sahar Ahmed; Editing by Simon Cameron-Moore)