(Adds detail, revenue by country and reasons for changes)
MILAN, March 7 (Reuters) - Italian dairy group Parmalat said on Friday its profit rose 172 percent to 221 million euros ($306.35 million) in 2013, and confirmed its sales and earnings guidance for 2014.
Parmalat said price increases and selling more profitable products offset a rise in the price of milk, but warned the higher milk price could continue to have an impact in the first two months of 2014.
The group based in Italy's gourmet heartland said core earnings fell 1.6 percent to 437.2 million euros, a drop the company blamed on a negative currency effect.
Parmalat, which makes over 40 percent of its revenue in North America, said its market share contracted slightly in the United States, as demand dropped for ricotta, mozzarella chunks, snack cheese and soft ripened cheese.
Parmalat singled out Russia and Italy as markets where the higher milk price could not be translated to sales prices, and contributed to an 11.4 percent drop in earnings before interest, tax, depreciation and amortisation (EBITDA) in the Europe area.
Revenue grew in the UHT segment in Italy, which accounts for about 85 percent of Parmalat's European sales. Sales in Africa were dented by a strike in South Africa in August.
Confirming its outlook for 2014, the group said sales and EBITDA would rise 3 percent at "constant exchange rates and scope of consolidation, excluding and excluding the effects of hyperinflation".
Parmalat said it would pay a dividend of 0.029 euros per share on 2013 earnings.
$1 = 0.7214 euros Reporting by Isla Binnie, editing by Danilo Masoni and David Evans