An expected operating loss for the Fiat Group of between €100m ($US98 million) and €150m on revenues of €14bn – and possibly a “modest” pre-tax profit – will be thanks only to the bank-enforced sale of one-third of Ferrari, the Financial Times (FT) said.

The newspaper said that it expects Fiat Auto, which accounts for 40% of group sales, to post an operating loss of between €350m and €400m.

The FT commented that such a result would would be better than the €439m first-quarter loss – but noted that analysts would be closely examining second-quarter cash flow to see if much needed cost-cutting measures have been implemented.

Cash outflow in the first quarter totalled €1.1bn but analysts hope it will be half that amount In the second quarter, the FT said.

“The outflow has to be dramatically better, hopefully better than the €500m to €700m most of us expect,” says John Lawson, a vehicle analyst at Schroder Salomon Smith Barney, told the Financial Times.

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An improvement of that magnitude would signal that Fiat Auto chief executive Giancarlo Boschetti had begun to deliver on promises made when appointed last December, the FT added.

The newspaper said Fiat’s creditor banks would be particularly watchful having, last May, imposed an industrial and financial restructuring that could result in them owning nearly 30% of Fiat in three years if the group does not meet several financial targets.

The banks also forced out group chief executive Paolo Cantarella, replacing him with Gabriele Galateri di Genola, the FT said.

The bankers say their plan can work even if Fiat Auto loses up to €1.6bn this year though such a loss would make the group’s other targets – a halving of net debt to €3bn by the end of the year – far harder to reach, the newspaper said.

“The numbers don’t look good, but we’ll try to stay calm until the fourth-quarter results come in. Our positions are protected by the deal with Fiat, but we don’t want to own part of it,” a banker who worked on the restructuring told the Financial Times.