update: on target for 06q2 profit

The purpose of this update is to provide shareholders and investors in Hyro Limited (“Hyro” - ASX :HYO) and the market with an update regarding the progress of the Hyro business Highlights

• First Quarter results evidence that Hyro has delivered results in line with estimates that were previously provided as part of 2006 revenue guidance, (estimated as $22M for the year); specifically: 1
o Revenue of $4.7M for 1Q06.
o Achievement of near break-even EBITDA for the quarter (an EBITDA loss of $57K).
o Reduction in cash outflows from operations from the previous quarter of more than $1 million, from $1,274K outflow for 4Q05 to $256K in 1Q06.

• The Company has increased its contracted backlog to approximately $8.0M at the end of 1Q06 compared to approximately $5M at the end of 2005. This represents an increase of more than 60% for the quarter.

• The Sales Pipeline as at end 1Q06 stands at $21M.

• The Hyro Thailand operation is profitable and cash flow positive for 1Q06.

• The Company has successfully been engaged to deliver high profile projects in 1Q06,
including:
o Mobile video (8 live channels), data, content and services for Telstra for the Melbourne 2006 Commonwealth Games

o Establishment of a new, “green-fields” internet based consumer financing business for Nissan Leasing Thailand

o Further development of the Victorian Online Gateway for Multimedia Victoria and supporting technology for the Federal Attorney General’s Department’s Family Relationship Advice Line.