April 30, 2007
Vancouver, BC, Canada

Dynamotive Reports 4th Quarter & Year-End Results

VANCOUVER, BC, CANADA, April 30, 2007 – Dynamotive Energy Systems Corporation (OTCBB: DYMTF), a leader in biomass-to-biofuel technology, today reported its fourth quarter and full year 2006 results.

For the fourth quarter ended December 31, 2006, the company reported a loss of $4.1 million or $0.02 per share, compared with a loss of $5.1 million or $0.04 a share for the same period a year earlier. The company’s full year 2006 net loss was $14.3 million, or $0.09 per share, compared with a net loss of $12.0 million, or $0.11 per share, for 2005.

Excluding stock-based compensation, Dynamotive’s 2006 net loss was $9.9 million, compared with $8.3 million during 2005, reflecting significantly increased activity in almost all business and research and development areas. (All figures are in US dollars.)

Total non-cash expenses were $5.0 million in 2006 ($5.1 million in 2005), relating to non-cash compensation and other non-cash charges.

As at December 31, 2006, cash and cash equivalents were $9.3 million, compared to $1.4 million at December 31, 2005, reflecting infusions from equity financings and warrant exercises.

The company recorded no revenues for the fourth quarter and full year but executed license contracts which included $950,000 of non-refundable deposits and delivered BioOil and electricity totaling over $150,000 which was recognized as a reduction of R&D expense.

Removal of $2.3 million write-down:

During the third quarter of 2006 the company recorded an asset write-down of $2.3 million related to the West Lorne plant upgrade, as certain equipment is being removed and disposed of.  This estimate of assets impairment has been reviewed as at December 31, 2006 and an updated estimate has confirmed that no write-down is required.  As a result, the company will file an amended third quarter report to reflect this revised estimate and removal of the write-down requirement.

Dynamotive also began construction of a state-of-the-art, modular 200 tonnes-per-day BioOil plant near Toronto to be owned in a shared arrangement. In December, the company temporarily shut down operations at the West Lorne, Ontario, commercial demonstration plant, for upgrading and expansion of its capacity.

Andrew Kingston, President and CEO, said: “During 2006, we continued to focus on paving the way for the company to move to operating status from its development phase. This included strengthening the senior management team as we prepared for capitalizing on existing and emerging market opportunities here in Canada, as well as in what is likely to become our largest single market, the United States. That market is moving aggressively toward greater adoption of alternative fuels and technologies, and we are working hard to make sure we are part of it.

“Meanwhile, in Canada, our new Guelph and reconstructed West Lorne plants in Ontario are on schedule. Guelph was recently hot commissioned and is on the brink of producing its first BioOil, and West Lorne construction is also on track,” he said.

“Both plants should be operating in the near future, with Guelph coming on stream later this spring and West Lorne resuming operations midyear.”

Kingston stated that these new plants will be more cost effective, with what is considered, he said, “appropriate size and a relatively small footprint, creating what we expect will lead to optimized throughput of biomass for our target markets. In addition, the modular design of the Guelph plant enables it to be readily duplicated, and at relatively low cost, to enable us and our facility partners to capitalize on the quantity and quality of the biomass available to operate them in various regions of Canada and in other countries.

“Overseas, our activities accelerated in Europe, South America and elsewhere last year, and that pace is continuing this year. We reached agreement with the U.K.’s Consensus Business Group to create new BioOil sources and pave the way for developing plants in Eastern Europe, and we set up the infrastructure for developing projects in Argentina and Australia as well.”

“Going forward, we see a significant number of attractive opportunities, with special emphasis on the U.S. market. We fully intend to confirm a major project for the U.S. market this year.”

Kingston concluded: “We expect 2007 to be a year of achieving significant milestones, and, as we move through the year, we expect to have at least two plants fully operational and producing revenue, several new projects underway on multiple continents, and a growing number of energy customers adopting our technology and making smart industrial use of our BioOil biofuel.”

2006 Highlights

Financial

• Completed two master license and two plant license agreements and received $950,000 of non-refundable deposits
• Sold more than $150,000 of product from its West Lorne plant in 2006 and these funds are credited against R&D expenditures.
• Strengthened balance sheet, with cash infusions from $27.5 million in new equity financings and warrant exercises used to fund operations, remove all debt from the company and to invest in the Guelph and West Lorne plants.
• Invested $4.2 million in R&D, net of sales and government support.
• Incurred $5.0 million in expenses related to non-cash compensation and other non-cash charges.

Operational

• Flagship Guelph plant in Ontario started construction.
• West Lorne plant in Ontario started its upgrade process with dismantling work.
• Offices established in Arlington, Virginia, close to Washington DC, as well as a South American headquarters in Buenos Aires and a European headquarters in London, UK. (All are now open)
• Strong interest in Dynamotive’s technology at key global biofuel conferences.
• Development of Intermediate BioOil grade.
• Successful testing of Intermediate BioOil as a potential feedstock for synthetic fuels.
• Successful emulsion tests of BioOil with diesel.

Summary financial results are presented as follows:

Consolidated Statement of Loss
(expressed in 000’s of US Dollars)
	Years Ended		3 Months Ended
	December 31		December 31
	2006	2005	2006	2005
	$	$	$	$
Expenses
Marketing and business development	1,768	1,200	374	648
Research and development	4,248	2,804	1,197	1,164
General and administrative	7,763	6,257	2,481	2,667
Depreciation and amortization	124	149	40	46
Interest expense	505	1,446	58	362
Exchange gain	-89	-34	-337	-5
Total expenses	14,319	11,822	3,813	4,882
Other (income) and expenses	25	(25)	391	(4)
Loss on write down of long-term assets		200		200
Loss before minority interest	14,344	11,997	4,204	5,078
Non-controlling interest	(92)		(92)
Loss for the period	14,252	11,997	4,112	5,078
Weighted avg. number of common shares outstanding (in thousands)	153,686	108,009	168,463	118,687
Loss per common share for the period	$0.09	$0.11	$0.02	$0.04

 

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